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West Coast port workers, shippers reach tentative agreement

West Coast port workers, shippers reach tentative agreement

Tentative agreement on new five-year contract closes nine months of negotiations

The Pacific Maritime Association and International Longshore and Warehouse Union Friday evening said a tentative agreement on a new five-year labor contract had been reached, though is still subject to ratification.

Related: 5 things to know about the West Coast port labor situation

The agreement closes nine months of talks that in recent weeks had led to shipping disruptions at 29 West Coast ports. About 80% of waterborne U.S. red meat exports move through West Coast ports.

The disruptions concerned agriculture groups, which feared the U.S. may lose market share due to its inability to serve export markets.

Tentative agreement on new five-year contract closes nine months of negotiations

"Since we began to see increasing congestion in the West Coast ports several months ago, the global customer base that the U.S. meat industry has spent decades building has been put at risk by shipping delays and by the uncertainty surrounding these contract negotiations," U.S. Meat Export Federation President Philip Seng said in a statement Saturday morning.

"This situation had become very damaging not only for exporters, but also for farmers, ranchers, processors and everyone in the supply chain," he said.

American Soybean Association President Wade Cowan also praised the deal as export customers are key consumers of soybean meal.

"As business owners, soybean farmers count on a smoothly-operating supply chain to stay competitive. The work stoppage on the west coast is something that continues to have ripple effects not only on soybean farms, but within the processing industry, and especially in the livestock industry that represents the top consumer of soybean meal," Cowan said.

According to a report from the Kurt Salmon research and consulting firm released earlier this month, West Coast port congestion issues could cost retailers an estimated $7 billion this year.

Related: Ag watches West Coast port labor situation as Labor Secretary steps in

If the agreement is ratified, an extended shutdown, which could have cost the economy $2.1 billion per day according to the research firm, was avoided.

"We are hopeful that the parties will ratify the new contract agreement as soon as possible and clear the backlog that currently exists in several major ports," Seng said.

The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh. Details of the agreement were not immediately released.

This story was updated Feb. 23 to include ASA comment.

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